House, Senate agree on budget with $10 billion in Medicaid cuts

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The House and Senate reportedly agreed Thursday to a budget blueprint that included $10 billion in Medicaid reductions over the next five years. These cuts represent a compromise between the two bodies, which had originally called for deeper and shallower cuts, respectively. The cuts would start in 2007.

Officials said the agreement includes savings of roughly $35 billion over five years from federal benefit programs. The largest single portion would come from Medicaid, which pays for the majority of nursing home care. Medicaid has been called the most sensitive part of the budget, according to some observers.

The Bush administration reportedly reached a deal Wednesday with Congress on Medicaid cuts, consenting to create a commission that would study Medicaid and make policy recommendations. Originally, the Senate had called for creation of the commission and elimination of $14 billion in proposed Medicaid cuts.

In contrast, Bush's fiscal year 2006 budget proposal called for reducing Medicaid by $60 billion over 10 years, and the $14 billion over five years. More in line with the administration's wishes, the House had approved a budget resolution with Medicaid savings of $15 billion to $20 billion.